How to Stay on the Right Side of Nondiscrimination Laws

How to Stay on the Right Side of Nondiscrimination Laws

Avoid discrimination in your company by taking a proactive stance. Following a few simple guidelines will help you to create and promote a workplace that encourages diversity and steers clear of discriminatory practices.

OVERVIEW [top]Through the Equal Pay Act, Title VII, of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Rehabilitation Act, and the Americans with Disabilities Act (ADA), the U.S. Federal Government protects eight categories of workers from discrimination. These are defined by race, national origin, religion, color, sex, age, disability and pregnancy. Thirteen states (California, Connecticut, Hawaii, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, Rhode Island, Vermont, Wisconsin) and the District of Columbia, plus an increasing number of cities and counties, now add sexual orientation to this list.
Discriminatory practices include bias in hiring, promotion, job assignment, termination, and compensation, along with various types of harassment.
Compliance is necessary, of course, but don't just focus on the legal implications. When designing your nondiscrimination policies, think about the effects of those policies on your employees and your business. Promote diversity for the benefits it brings to your company — creativity, new ideas and a broader workforce from which to draw employees.
In this Quick Read you will find:

Common mistakes employers make.

Ways to minimize your legal exposure.

SOLUTION [top]
U.S. employers today fear discrimination lawsuits with good reason. According to Jury Verdict Research, the median jury award in discrimination and sexual harassment lawsuits against employers rose from $64,750 in 1996 to $250,000 in 1997 [Gerald E. Calvasina et al., "Management and the EEOC," Business Horizons, July 2000: 3]. Between 1988 and 1992, the average jury award totaled $151,421 for disability discrimination, $176,578 for race discrimination, $255,734 for sex discrimination (including sexual harassment), and $450,289 for age discrimination.
Anti-discrimination laws tend to be broad enough to cover many different kinds of situations. For example, the ADA says the employer must make a reasonable accommodation for anyone with a protected disability, but it also says that the remedy can't cause undue financial hardship to the employer. Because these laws leave room for interpretation, you should work with your lawyer and the Equal Employment Opportunity Commission to find the relevant legal precedents and standards for your industry.
Experts say, however, your true vulnerability lies in these six scenarios:

Antidiscrimination laws aim primarily at the hiring, firing and promotion processes. Many companies find themselves especially snarled in difficulties at an employee's exit. To avoid the appearance of impropriety, keep detailed records of employee reviews, hiring documents, and any disciplinary actions. For more on terminating without trouble, see "How to Fire Employees."

Many entrepreneurs define discrimination in its starkest terms: "I won't hire a black female." But instances of discrimination can be far more subtle, such as terminating older employees just before their pensions vest.

Smaller companies tend to adopt the founder's personal philosophies, so these leaders assume if they don't discriminate, others will follow their good example. Unfortunately, middle management often crosses the invisible line unnoticed and uncorrected, thanks to this blind spot.

Co-worker abuse is especially easy in jobs such as construction or security where small groups of employees are located at a separate, isolated post.

Some diversity trainers extract each individual's latent discriminatory feelings in an attempt to diagnose and "fix" employees. In the process, they create a record that can be admitted as evidence in a discrimination lawsuit down the line. Jim Redeker, chair of the employment services department of Wolf, Block, Schorr and Solis-Cohen LLP in Philadelphia, says he has defended at least six cases stemming from this mistake.

Employers who view antidiscrimination laws as a legal issue, rather than as an opportunity to increase workplace diversity, tend to function defensively, spawning adverse employee reactions, divisions and a heightened sensitivity, all of which lead to litigation. The message should be "Diversity benefits our company," rather than "Don't discriminate because it's illegal."

By the time an employee complains to management, the situation may be slipping out of control. It is, therefore, imperative that you take preventative measures. Spell out in the employee handbookwhat you will and won't tolerate in terms of behavior, and reiterate these policies verbally in everyday communications with employees. Don't be afraid to be specific. According to Redeker, blanket statements such as, "If you engage in sexual harassment, you will be terminated" makes the too-vague legal standard your standard. Disciplining an employee for dating a subordinate or repeating jokes with ethnic slurs offers a much lower and a much clearer threshold. Your focus shouldn't be on changing people's thinking, but on regulating what you will and won't tolerate on company property and time.
Next, be consistent with discipline on antidiscrimination issues. Continue supervisory training sessions that emphasize the benefits of diversity. If you do discuss the law's scope and definitions, make sure information and instruction are current. Guidelines from last year's seminar may not be valid this year.
Above all, explain your approach to antidiscrimination policies from a positive viewpoint. At every opportunity point out the financial advantages of working with diverse array of customers, suppliers and partners, and stay alert to creative opportunities to keep this edge.
REAL-LIFE EXAMPLE [top]
The human resources team at a manufacturing firm in Florida administers a basic reading, writing and math test to all managerial candidates to assess their ability to cope effectively with e-mail correspondence, production numbers and other daily assignments. Unfortunately, the local school system, from which the firm draws many workers in this small community, often found itself the target of criticism for its lack of educational effectiveness.
As a result, a majority of hopefuls failed the manufacturer's test, leaving it with no minorities in supervisory ranks, even though 60% of the employees on the company's payroll were African Americans. Frustrated, workers filed a class-action discrimination suit against the employer.
The manufacturing firm re-evaluated its stance and decided everyone wins with a diverse and educated workforce. So it partnered with the local community college to offer evening classes at the firm's expense to help interested workers polish these basic skills. Within a year, minorities found themselves increasingly promoted to upper-level positions.
DO IT [top]

To set the right tone, research the value of diversity to your bottom line. For example, the 75 million cultural minorities in the United States today represent a $1.125 trillion consumer market. Pass along these findings to employees.

Hire legal help to draft an employment handbook as your team grows — federal and state laws have different requirements on the number of employees a company may have before compliance is necessary. Before that stage, verbally address your antidiscrimination policies during meetings.

If you want to make diversity a priority at your company, make sure your mission statement and goals reflect that. Then put company-wide measurable objectives in place to support the goals.

Establish clear channels for complaint to someone other than immediate supervisors, and act promptly on any complaint. The Supreme Court recently ruled that in sexual-harassment cases, a strong policy followed by training and immediate action to stop a behavior works in the employer's favor.

Make clear to supervisors that part of their job evaluation rests on how well they function in a diverse workforce and how effectively they promote diversity and ensure harmonious behavior.

Monitor the ongoing results of your advancement, educational and training programs to chart who is given opportunities, who is promoted and who is disciplined. If one supervisor leans toward one ethnic or gender group in any category, consider it a danger sign. Remember, though, that company-wide totals are most important. It would be statistically unusual notto have lots of variation among small units at an organization.

Establish a mentoring program to encourage newcomers and old-timers to communicate and help each other. Make it clear that mentoring across ethnic/gender lines will score points at evaluation time. Mentoring-program guidelines can be found in "The Importance of Mentoring Programs."

Visit departments regularly, and react instantly and emphatically any time offensive behavior occurs.

Show respect by occasionally addressing employees for whom English is a second language in their native tongue, both in conversation and written communications such as employee handbooks and newsletters.

Consider looking outside your company to address diversity issues, such as hiring an outside HR firm to audit the nondiscrimination policies at your company or by outsourcing some work to minority subcontractors.

Related Articles

Articles in our Entrepreneur’s Resource Center appeared in print and online newsletters published previously by the foundation. More than 1,000 articles can be found in the categories below, addressing timeless challenges faced by entrepreneurs of all types.